BANGOR, Maine — Lobster broker Francis “Frank” Donnelly, a Lamoine resident who sold approximately $2.9 million worth of crustaceans during 2003 and 2004, was sentenced Monday for filing false tax returns for those two years.
U.S. District Judge John Woodcock sentenced Donnelly, 64, to a year plus a day in federal prison, imposed a $3,000 fine and ordered him to pay $89,331 in back taxes.
While handing down Donnelly’s sentence, Woodcock said he didn’t believe the defendant’s claims that he didn’t pay all of his taxes for 2003 and 2004 because he is a war tax resister and opposes funding war activities.
“Mr. Donnelly is a common, ordinary, run-of-the-mill … tax cheat,” said Assistant U.S. Attorney James McCarthy, who prosecuted the case. “Now, after the fact, [Donnelly’s defense is] trying to hide behind the facade of the principle of war tax resister.”
About 35 local anti-war protesters stood in front of the Margaret Chase Smith Federal Building just before the sentencing hearing began. At least two spoke in support of Donnelly, who has said he underreported his taxes because he opposes war and doesn’t want his tax dollars used to support “killing children.”
“For about 40 years Frank has decided not to pay for it [the cost of war],” said Larry Dansinger of Monroe. “It’s an option that the IRS calls tax fraud.”
A dozen of those supporters sat through the daylong sentencing hearing, which began at 9 a.m. and didn’t end until nearly 6 p.m. Most of the day was spent trying to determine exactly how much money Donnelly made during 2003 and 2004 — a process used by Woodcock to arrive at the amount of the defendant’s restitution and the length of his prison term.
After going back and forth for hours, Woodcock decided to use figures provided through an investigation by Internal Revenue Service special agent Debra Sousa, who said she used checks, bank figures and handwritten documents provided by Donnelly.
“He reported a net profit of $5,000 on gross sales of $1.3 million” for 2004, and made similar profit claims for 2003, Woodcock said.
Donnelly recorded in excess of $1.5 million in gross sales for 2003, the same year he purchased a vacation property in Costa Rica for $120,000, Sousa’s investigation showed.
To make things more difficult, the handwritten records provided by the defense had several items blacked out, which hindered the investigation, the IRS investigator told the judge.
“In 2003, 12 transactions are redacted,” Sousa said. “In 2004, there are six transactions that are redacted.”
Those items were blacked out for Fifth Amendment reasons, because they could lead to other criminal charges, defense attorney Virginia Villa explained to the court.
Donnelly, who owns his Lamoine home, property in Florida and the Costa Rica condominium outright, is now receiving food stamps, gets low-income heating assistance and had the services of a court-appointed attorney, according to McCarthy and Woodcock.
When Donnelly pleaded guilty in U.S. District Court during November to filing false tax returns in 2003 and 2004, he admitted that he lied on his federal and state income tax returns.
Woodcock gave five basic reasons for the sentence he imposed and his reasons for not believing Donnelly’s claims of being a war tax resister. He said Donnelly never made his war tax protest public, he didn’t notify the IRS about his protest, he didn’t pay his state taxes, he benefited by not paying the full amount, and he is now getting benefits from other taxpayers.
Woodcock was especially peeved by Donnelly’s Costa Rica vacation property, which he did not claim when applying for his court-appointed lawyer.
“That is not, in my view, an action of a moral human being,” the judge said.
Three of Donnelly’s supporters and Donnelly himself spoke to the court before Woodcock issued his sentence. His friends said he gives back to his community and should be shown leniency. Donnelly, who served in a military reserve unit during the Vietnam War, went AWOL — or absent without leave — in 1971, and refused to wear his uniform, according to his supporters. He was eventually court-martialed and discharged from the military, they said.
“I regret not being forthright in my war tax resistance,” Donnelly told the judge. “This is not new to me.”
Donnelly told a psychologist in 1975 that he didn’t want to pay taxes to support war, according to Villa.
“The prosecution says I’m a wealthy man,” he said to the judge. “I’m not a wealthy man. There was a couple of years where I made some money. I was chasing the American Dream.”
Donnelly must report to a federal prison, to be determined by the U.S. Bureau of Prisons, on July 26.